Kinross Gold Corporation · TSX:K
Kinross Gold — 30th Annual Gold Forum Americas (September 2019)
62 slides from Kinross Gold's conference presentation, Sep 16, 2019
Slide 1: Delivering Value.
September 2019 Delivering Value. Kinross Gold Corporation
Slide 2: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward-Looking Information All statements, other than statements of historical fact, contained or incorporated by reference in or made in giving this presentation and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Kinross Value Proposition
Kinross Value Proposition Operational Excellence Financial Strength & Flexibility Diverse portfolio of operating mines consistently Leveraging our financial strength to invest in our meeting or outperforming operational targets development pipeline Repaid over $1.0 billion of debt 7 Consecutive Met
Slide 4: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 4
Slide 5: Diversified Portfolio of Assets
Operational Excellence September 2019 Diversified Portfolio of Assets ~60% of 2019E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Fort Knox, USA Russia Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2019E Gold Equivalent Production(1,2) 20
Slide 6: Strong Operating Results
Operational Excellence September 2019 Strong Operating Results Continued track record of meeting or outperforming our operational targets • Strong production and excellent cost performance from the portfolio • On track to meet 2019 guidance targets for production, cost of sales, all-in sustaining co
Slide 7: Operational Highlights
Operational Excellence September 2019 Operational Highlights Our three largest operations produced over 60% of total production in the second quarter, with an average cost of sales(3) of $607/oz. Operation Q2 2019 Performance Highlights Paracatu, Brazil • Third consecutive quarter of Production (Au.
Slide 8: Achieving Performance Improvements at Paracatu
Operational Excellence September 2019 Achieving Performance Improvements at Paracatu Realizing the benefits of asset optimization and continuous improvement efforts through strong performance and cost reductions Strong performance driven by: Paracatu quarterly performance • Asset optimization progra
Slide 9: Tasiast Phase One Exceeds Expectations
Operational Excellence September 2019 Tasiast Phase One Exceeds Expectations Strong performance of the Phase One expansion resulting in three consecutive quarters of strong production and improved costs • Significant improvement in Tasiast’s performance Tasiast quarterly performance following comple
Slide 10: Kupol / Dvoinoye Continues to Deliver
Operational Excellence September 2019 Kupol / Dvoinoye Continues to Deliver Our high-grade Kupol and Dvoinoye mines are consistent low-cost producers Q2 results highlights • Cost of sales(3) decreased by $36/oz. compared Kupol/Dvoinoye quarterly performance to Q1 2019 • Production at Dvoinoye Zone 1
Slide 11: 2019E Production and Costs
Operational Excellence September 2019 2019E Production and Costs(2) Kinross Total(1) Regional Guidance 2019E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(1,3) $730/oz. (+/- 5%) (+/- 5%) 1.44 million 2019E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining c
Slide 12: Financial Strength & Flexibility
Financial Strength & Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 12
Slide 13: Strong Liquidity Position
Financial Strength & Flexibility September 2019 Strong Liquidity Position Strong position to finance organic development projects with existing liquidity and cash flow generation Financial Flexibility Liquidity Position ($ billion) • Available liquidity of $1.9 billion • Manageable debt schedule wit
Slide 14: 2019E Capital Expenditures
Financial Strength & Flexibility September 2019 2019E Capital Expenditures(2) • 2019 capital expenditures are expected to be $1,050 million (+/- 5%), including estimated capitalized interest of $65 million 2019E 2019E Total 2019E Capital Region Sustaining Capital Non-Sustaining Capital (+/- 5%) Amer
Slide 15: Manageable Debt Profile
Financial Strength & Flexibility September 2019 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Revolving credit facility (drawn amounts) Senior notes Agency Rating S&P BBB- (Stable) $155 (i) Moody’s Ba1 (Stable) Fitch BBB- (Stable) $500 $500 $500 Interest Rates $
Slide 16: Development Projects & Exploration Highlights
Development Projects & Exploration Highlights We have a portfolio of development projects that we are progressing, and we are also focused on advancing a pipeline of future opportunities and high potential exploration targets 16
Slide 17: Tasiast 24k Project Feasibility Study Results
Development Projects September 2019 Tasiast 24k Project Feasibility Study Results Proceeding with value-enhancing Tasiast 24k project, which offers attractive returns, increased production and lower costs Operating Estimates Throughput capacity 24,000 t/d Average annual production (2022 – 2028) 563,
Slide 18: Low-Capital Continuous Improvement Approach
Development Projects September 2019 Low-Capital Continuous Improvement Approach Increase to throughput through debottlenecking initiatives, plant upgrades and optimization of the mine plan and processing circuit Building off success of Phase One and Project Overview continued outperformance of the S
Slide 19: Advancing Tasiast 24k Project
Development Projects September 2019 Advancing Tasiast 24k Project Well-positioned to execute the 24k project Low relative execution risk • Project plan leverages Kinross’ experience successfully building and operating Phase One • Less infrastructure requirements • Permits in place for the 24k projec
Slide 20: Mauritania Update & New Labour Agreement
Development Projects September 2019 Mauritania Update & New Labour Agreement Tasiast 24k project expected to generate significant benefits to the economic and social development of Mauritania Government Engagement • Resumed engagement following 2019 presidential election in June • Recent meetings he
Slide 21: Round Mountain Phase W Overview
Development Projects September 2019 Round Mountain Phase W Overview The Phase W project is expected to extend mining by 5 years at one of Kinross’ top performing mines located in one of the world’s best mining jurisdictions 21
Slide 22: Phase W Feasibility Study Results
Development Projects September 2019 Phase W Feasibility Study Results Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Estimates Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024)(3) $765 per g
Slide 23: Round Mountain Phase W
Development Projects September 2019 Round Mountain Phase W The Phase W project is nearing completion; achieved first gold pour in May • Project nearing completion; advancing on schedule and on budget • Vertical carbon-in-column plant now complete and in operation • Construction of mine infrastructur
Slide 24: Fort Knox Gilmore
Development Projects September 2019 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 24
Slide 25: Gilmore Feasibility Study Results
Development Projects September 2019 Gilmore Feasibility Study Results Project expected to generate a 17% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Gilmore estimates Average annual production (2018-2027) 245,000 gold ounces Production cost of sales (2018-2027)(3) $735 per g
Slide 26: Fort Knox Gilmore
Development Projects September 2019 Fort Knox Gilmore Initial production from Gilmore is expected in early 2020 • Advancing on budget and on schedule • Construction of new Barnes Creek heap leach pad underway • Dewatering for pit layback proceeding according to plan • Commenced stripping in late Q3
Slide 27: Bald Mountain Vantage Complex
Development Projects September 2019 Bald Mountain Vantage Complex Vantage Complex project in the South Area of Bald Mountain is well-advanced • Achieved first gold pour in late June • Heap leach pad now complete • Vertical carbon-in-column plant now in operation First gold pour • Construction of min
Slide 28: Chile Projects
Development Projects September 2019 Chile Projects We are evaluating the potential for a return to production in Chile La Coipa Restart Project N • Feasibility study continues to advance La Coipa Restart Lobo-Marte Project project • Scoping study completed in Q1 2019 with encouraging results, includ
Slide 29: Kupol Exploration Highlights
Exploration Highlights September 2019 Kupol Exploration Highlights Many targets identified along the main Kupol West Licence N Kupol trend NE-EXT • In 2018, primary objective was to test Kupol Mining Licence depth and north extensions of the main NE Kupol vein system NU • Drill intercepts continued
Slide 30: Another 1-Year Mine Life Extension in Russia
Exploration Highlights September 2019 Another 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye (4) Cumulative Production (Au eq.) Proven and Probable Reserves (Au eq.) 7.4 2.1 2018 • Estimated mill production extended to 6.
Slide 31: Chirano Exploration Highlights
Exploration Highlights September 2019 Chirano Exploration Highlights Production at Chirano is expected to extend to 2021, a 1-year extension • 2018 exploration focus continued to be adding incremental ounces to mine life Focused on infill drilling the depth potential at Akwaaba and Paboase • Follo
Slide 32: Kinross to acquire high-quality development project
Kinross to acquire high-quality development project 32
Slide 33: Transaction Overview
Kinross to acquire high-quality development project September 2019 Transaction Overview • Kinross has agreed to acquire 100% of the Chulbatkan project from N-Mining Limited, Transaction a private company details • Kinross has a right of first offer for properties within 25 km of outermost claim boun
Slide 34: Strategic Rationale
Kinross to acquire high-quality development project September 2019 Strategic Rationale High-quality • High-grade open pit heap leach project which is expected to be a significant, low-cost mine development project • Large near-surface deposit with ~4Moz. estimated of indicated gold resource and 80ko
Slide 35: Project Location
Kinross to acquire high-quality development project September 2019 Project Location Khabarovsk is industrialized and has a well-established mining and exploration sector Mining-friendly jurisdiction Kupol • Several gold producers active in the region Magadan Ten operating mines Khabarovsk Fourth
Slide 36: Overview of the Chulbatkan Resource
Kinross to acquire high-quality development project September 2019 Overview of the Chulbatkan Resource Near-surface, relatively high-grade, open-pit, heap leachable deposit with large estimated resource • Near surface, highly continuous • Current resource extends to ~375m, with grades mineralization
Slide 37: High-Quality Asset with Attractive Cost Structure
Kinross to acquire high-quality development project September 2019 High-Quality Asset with Attractive Cost Structure Expected to be a substantial gold mine with a low Significant Due Diligence over all-in sustaining cost Past 16 Months • Preliminary estimates; scope of project may change • Joint dri
Slide 38: Significant Upside Opportunities
Kinross to acquire high-quality development project September 2019 Significant Upside Opportunities Kinross plans to undertake a robust exploration program with a focus of defining and further extending the resource • Current resource estimate limited to extent of drilling completed to date Signif
Slide 39: Regional Exploration Upside
Kinross to acquire high-quality development project September 2019 Regional Exploration Upside Numerous untested potential targets within the ~120km2 exploration license • Multiple structural environments analogous to Chulbatkan deposit • Multiple downstream placer gold occurrences indicate hard roc
Slide 40: Deep Experience In-Country
Kinross to acquire high-quality development project September 2019 Deep Experience In-Country Kinross has a long and successful 24-year track record investing in Russia Significant operating experience 2018 Statistics: Kinross • Operated 4 mines, including the high-grade, low cost investments in Rus
Slide 41: Excellent Fit for Kinross
Kinross to acquire high-quality development project September 2019 Excellent Fit for Kinross Chulbatkan has the potential to be a significant low cost operation and is expected to strengthen our longer-term production and cash flow profile in Russia Quality asset with strong upside Trial mining pi
Slide 42: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 42
Slide 43: 2018A Production & All-In Sustaining Cost
Compelling Relative Value September 2019 2018A Production & All-In Sustaining Cost 2018A Production 2018A All-In Sustaining Cost (million ounces) ($ per ounce) $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Gold Fields Gold Fields Newmont AngloGold AngloGold Barrick Kinross Newcrest Ag
Slide 44: 2019E Metrics
Compelling Relative Value September 2019 2019E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2019E EBITDA P / 2019E Operating CF 15.9 14.4 9.9 10.4 8.7 9.6 7.4 6.6 6.5 5.7 5.6 5.7 5.2 5.2 4.4
Slide 45: Appendix
Appendix 45
Slide 46: Responsible & Safe Tailings Management
Appendix September 2019 Responsible & Safe Tailings Management All of our tailings facilities are designed and constructed to the highest engineering standards and meet or exceed regulatory and international requirements and standards of best practice • Tailings management programs incorporate Parac
Slide 47: Currency & Oil Sensitivities
Appendix September 2019 Currency & Oil Sensitivities 2019 Budget Assumptions(2) 2019 Sensitivities (net of hedges)(2) Change from Estimated impact 2019 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200 US$1,496 FX 10% US$18/oz. (per ounce) Russian rouble 10% US$19/oz.(ii) Oil US$65 U
Slide 48: Fort Knox, USA (100%)
Americas September 2019 Fort Knox, USA (100%) The Gilmore project is expected to extend mine life to 2030 • Successfully operating one of the world’s Operating Results(3) few cold weather heap leaches 2018 H1 2019 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Production 255,569
Slide 49: Summary of Feasibility Study Results
Fort Knox Gilmore September 2019 Summary of Feasibility Study Results Operating Estimates (current mine plan + Gilmore) Incremental Gilmore Estimates(i) Timeline Operational Metric Estimate Estimate Average annual tonnes mined 60 million Strip ratio 1.2 Strip ratio 1.2 Life of mine ore processed 183
Slide 50: Round Mountain, USA (100%)
Americas September 2019 Round Mountain, USA (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid Operating Results(3) returns and extend mining 2018 H1 2019 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual
Slide 51: Summary of Feasibility Study Results
Round Mountain Phase W September 2019 Summary of Feasibility Study Results Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per ton
Slide 52: Bald Mountain, USA (100%)
Americas September 2019 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2018 H1 2019 additions • In 2018, achieved record production; low
Slide 53: Paracatu, Brazil (100%)
Americas September 2019 Paracatu, Brazil (100%) Large gold mine with a long mine life that extends to 2032 • Paracatu is among the world’s largest gold Operating Results(3) operations with annual throughput of ~60Mt 2018 H1 2019 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine l
Slide 54: La Coipa Restart Project PFS Results (2015)
Americas September 2019 La Coipa Restart Project PFS Results (2015) Project expected to generate a 20% IRR at an assumed gold price of $1,200 per ounce • The pre-feasibility study estimates a 5.5 year mine life, following commencement of stripping Processing expected to commence 1.5 years after pr
Slide 55: Kupol-Dvoinoye (100%)
Russia September 2019 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by 1 mill 2018 H1 2019 • Estimated mine life: 2023, following another Production 1-year extension in 2018
Slide 56: Foreign Investment in Russia
Russia September 2019 Foreign Investment in Russia The world’s leading companies are Foreign Investment Advisory Council invested in Russia • Chaired by the Russian Prime Minister, includes CEOs from over 50 international companies 56
Slide 57: Tasiast, Mauritania (100%)
West Africa September 2019 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Successfully completed the Phase One Operating Results(3) expansion in 2018 2018 H1 2019 • Advancing the 24k project to further Production increase throughput (Au. Eq.
Slide 58: Feasibility Study Results: Operating Estimates
Tasiast 24k Project September 2019 Feasibility Study Results: Operating Estimates Results Highlights Life of Mine Estimates (2020-2033) Timeline Operational Metric Estimate Operational Metric Estimate Total material mined 375,900,000 Total tonnes mined 628,800,000 Strip ratio 5.9 Total ore mined (to
Slide 59: Feasibility Study Results: Capital & Economics
Tasiast 24k Project September 2019 Feasibility Study Results: Capital & Economics Estimated Initial Capital Cost Estimated Sustaining Capital • Expected to be approximately $30M per year Estimate ($ millions) Life of Mine estimate ($ millions) Support infrastructure 47 Mobile maintenance 150 Process
Slide 60: Chirano, Ghana (90%)
West Africa September 2019 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2018 H1 2019 • Estimated mine life: 2021 Production 204,029 95,104 (Au. Eq. oz.)
Slide 61: Endnotes
Appendix September 2019 Endnotes 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and production cost of sales figures in this presentation are based on Kinross’ 90% share of Chirano production and sales. Also unless otherwise noted, dollar per ounce ($/oz.) figures
Slide 62: Slide 62
Kinross Gold — 30th Annual Gold Forum Americas (September 2019) on 6ix